Private Equity Fund Accounting Essentials

There are a bunch of expert hedge fund accountants out there who haven’t a clue about private equity fund accounting. Why would they? They’ve been working on hedge funds for the last 10 years, or whatever. Consequently, should their firm take on private equity funds, those accountants are at a serious disadvantage.

Taking on the fund accounting for private equity from another service provider can be a challenge, even for those with some private equity accounting experience. However, serious control issues can arise if the expertise is not already in place. A learning curve can only be so steep before it falls back on itself!

So. I’m going to run a number of posts on private equity fund accounting. The posts will address the following:

Commitments & Closings

Drawdowns

Equalisation (‘True-up’)

Interest Compensation Charge

Excused Investor

Expenes

Management Fee Basics

Management Fee Challenges

Carried Interest – Preferred Return

Carried Interest – Catchup

Carried Interest – Deal-by-Deal Model

Carried Interest – Whole-of-Fund Model

Carried Interest – Hybrid Model

I might change my mind as I go along and add to, or subtract from, the above list. I'll also take into account suggestions received for specific topics for inclusion.

Each post will be brief. Where appropriate, examples will be included. The series does not set out to provide you with ‘All You Ever Need to Know About Private Equity Accounting’. You will, however, be provided with some tools with which you can tackle the PPM, the administration agreement, and that spreadsheet you just inherited !